×
You will be redirected back to your article in seconds

Hollywood Races for Commercial Real Estate Spaces

There’s no room in Hollywood. Unprecedented low vacancy rates in the single digits equals a competitive race from soundstages to Class A creative office space from the Valley to the Pacific.

“The occupancy around town is at 97%, an all-time record,” says Jones Lang LaSalle’s Carl Muhlstein, an international director with the real estate and investment management services company. The veteran real-estate pro helped sign Viacom into Kilroy Realty’s Columbia Square and Netflix to Kilroy Realty’s ON Vine, the city block-sized, mixed use complex, with 16,500 square-feet of purpose-built studio and production space, under construction just south of Sunset Boulevard between Vine Street and Cahuenga Boulevard.

Tech giants (Netflix, Amazon, Google and Apple) and their deep-pocketed investments into streaming and content production are driving the demand for entertainment biz-focused properties in L.A.’s red-hot commercial real estate sector. A dramatic change in leasing terms, per Muhlstein, is another factor: instead of booking soundstages as needed (once a show was picked up), the new norm is to lock in available square footage via long-term leases. “There’s been record pre-leasing by entertainment and media companies of new construction projects before completion,” he adds.

Feeding the frenzy are third-party players (Hackman Capital, Worthe Real Estate, CIM Group and Kilroy Realty). Look no further than recent purchases and announcements for proof of the sector’s vibrancy.
Major deals include the buyout of the midcentury modern style CBS Television City by Hackman Capital Partners for $750 million, Amazon and its subsidiaries’ leasing of the Culver Studios and adjacent Culver Steps development, both also owned and redeveloped by Hackman Capital Partners; CIM Group’s acquisition and addition of contemporary office towers on The Lot; and Worthe Real Estate’s build out for Warner Bros. of two Frank Gehry designed office towers adjacent to the Burbank Studios, acquired by Warner Bros. earlier this year.

Partially fueling investment and growth is the low cost of capital: combine low interest rates with the rise of content providers and demand seems to be outstripping the current supply, certainly in the affordable housing sector.

“The market is very strong and you could argue it might be too strong and overheated,” says Rick Caruso, the billionaire developer closely tied to Southern California’s fortunes. “I think we have to be mindful as a city to drive business here and not take it for granted.”

More Digital

  • Editorial Use onlyMandatory Credit: Photo by

    YouTube Institutes Stricter Harassment Policy, Won't Exempt Public Figures

    YouTube has promised to ramp up its fight against hate and harassment: The Google-owned video service announced changes to its harassment policy Wednesday, which include a ban on implicit threats of violence and insults that target someone for their race, gender expression or sexual orientation. “We will not tolerate harassment,” said YouTube’s global head of [...]

  • Janko Roettgers, Jeremy Legg, Vicky Colf,

    Listen: Inside HBO Max's Streaming Strategy With WarnerMedia CTO Jeremy Legg

    HBO Max may not be streaming to consumers until May 2020, but for Jeremy Legg, the hard work has already begun. The WarnerMedia chief technology officer is deep into the development of parent company AT&T’s highest priority next year. While rival efforts from Disney and Apple are already in market, he envisions launching a product [...]

  • quibi

    Quibi Orders Gaming Thriller ‘Curs_r’ From Anton, Stigma, Ridley Scott

    Quibi has greenlit the development of “Curs_r,” a gaming drama series executive produced by Anton, Stigma Films and Ridley Scott. The series will be directed by Toby Meakins (“Bite Size Horror”) and is written by Simon Allen (“The Watch,” “Das Boot,” “The Musketeers”). Matthew James Wilkinson (“Yesterday,” “Amulet”) is producing. The series centers on the [...]

  • Susie Banikarim - Vice News

    Vice News Hires Susie Banikarim to Head Newsgathering Operations (EXCLUSIVE)

    Susie Banikarim, a journalist with nearly two decades of experience in digital and TV news, is joining Vice News as one of its top editorial execs. Vice Media Group tapped Banikarim as executive VP and global head of newsgathering for Vice News, a newly created role. She will be based out of Vice’s Brooklyn headquarters [...]

  • Daniel Ek Spotify

    New Netflix Original to Tell the Story of Spotify's Creation

    In a case of one disrupter telling the story of another, Netflix has boarded a series about the creation of Spotify, the Swedish startup that’s become one of the world’s leading music services. The as-yet-untitled limited series, to be directed by Per-Olav Sørensen (“Quicksand”), is inspired by the book “Spotify Untold” by Sven Carlsson and [...]

  • Jamie Gutfreund Greg Coleman - Tubular

    Tubular Labs Adds Jamie Gutfreund, Greg Coleman to Board

    Video-measurement firm Tubular Labs announced two additions to its board of directors: Jamie Gutfreund, ex-chief strategy officer of CAA and formerly Hasbro’s chief consumer experience officer, and Greg Coleman, former president of BuzzFeed. Gutfreund and Coleman are not personally investing in Tubular Labs but will receive stock options in the privately held company. They join [...]

More From Our Brands

Access exclusive content